After having sent out request for qualification (RFQs) across companies, even on a global scale, Sanjay Bhatia, vice chairperson and managing director, CIDCO, says the bidders will get four months to submit their financial proposals for the new Mumbai Airport.
Speaking to CNBC-TV18’s Sonia Shenoy and Latha Venkatesh, Bhatia says the company has already acquired all the clearances required for the project.
Bhatia says the bidding for the project is likely to be very aggressive as the airport is the one of the biggest project in India and the eight biggest in the world. “We saw a lot of interest even at the Davos summit and the Zurich airport authorities too have assured that they would bid for the airport.”Bhatia further adds that GVK Power & Infra will be given an opportunity to match the highest bid for the airport if its bid is lower by 10 percent.
Also read: Interest burden, subdued power biz hitting performance: GVK
Bhatia expects the final bidder details to be cleared by December 2014-Jan 2015 and the commercial operations to begin by 2018. Below is the edited transcript of the interview to CNBC-TV18.
Latha: What is the timeline you see from hereon? We understand that this request for qualification is a very preliminary process. How long before the actual construction bid is given out?
A: This is a global tender which has been invited, so this is a regular process. This is not a preliminary process or anything; this is the real process which has started and we have given them four months to come for qualification.
Those who get qualified for public private partnership (PPP) tender, they will be giving their proposal and on the basis of the financial proposal, we will be finalising the PPP partner, who will be constructing the whole airport.
Simultaneously, for the first time, we are doing other processes. For example, we have taken all the clearances; environmental clearances with us, wildlife clearances, forest clearances, high court clearance, mangrove removal clearance, civil aviation clearance.
In earlier projects, the partner used to be asked to get all these clearances and that is not there this time. Everything is through. There’s only a little lacuna in the land acquisition where the deal has been struck and we are going in for the acquisition. I am expecting that in the next four months some part of the land, which is still to be acquired will also be acquired.
Latha: You mean that 247 hectares will also be acquired in four months?
A: Yes, we are expecting that we will do it in the next four months. We are talking to the Sangharsh Samiti, in fact they have already dealt with us and a negotiated deal has been struck with the Honourable Chief Minister. However, I have been hearing that two-three villages have been opposing but I am sure that will also go through.
On this project, the pre-development works have been done by us- the leveling and everything. So, when the bidder comes, he has everything ready. He has to just start the airport construction project.
Sonia: What could the bidders’ list look like because we understand that GVK Power & Infrastructure, GMR Infrastructure etc are looking at it but there are talks that others like Larsen and Toubro (L&T), Reliance Infrastructure may also participate. Who are the potential bidders and how aggressive do you think the bidding could be?
Latha: Will GVK have the first right of refusal?
A: I think it is going to be an aggressive bidding because in India it’s the biggest projects today and in the whole world it is among the eighth biggest project. So, there is going to be an aggressive bidding and when we went to Davos with the Chief Minister, the Zurich airport showed a lot of interest. They said they will bid and number of companies are coming and wanting to meet me and they are showing interest.
Regarding GVK, yes, when the original airport was given to them by the civil aviation ministry, at that time in the clause itself this clause was there that if they bid and with respect to the highest bid, if it is within 10 percent, then they will be given opportunity to match the highest and take it.
That is the clause, which is there in this. I have uploaded this document on my website and it can be downloaded by anyone. So the whole RFQ document is available.
Sonia: The document pegs the cost of the airport construction for the first two phases at around Rs 9,500 crore but the total cost of the airport was not disclosed. Can you throw some more colour on that?
A: Total cost is Rs 14,500 crore and this project is done in phases. The partner, who comes along with us, will be taking 26 percent stake in that. The first phase is 10 million passengers per annum because as per the calculation which has been done – that is what is required immediately for Mumbai and they reach 25 and 35 by 2030 they have to reach 60 million passengers per annum. So, the total cost which we have envisage today is about Rs 14,500 crore but all the bid calculations has been done based on first two phases Rs 9,500 crore.
Latha: When would the bid is given out. You have given them four months for the qualification bids to come in, you will also have a technical bids coming in separately. So, when will the bid be given out? In 2014 we will know who is building the airport?
A: This qualification bid itself is a technical bid. So, they come with technical proposals and we qualify the technical bidder and ask them to give a proposal for the financial bid after four months. After four months it will take about a month or so.
Sonia: This project is of interest to all the Mumbaikars. Do you think it will be by the end of 2017 or will we have to wait till 2018? What does the timeline look like?
A: I think it is 2018 because this whole process takes about a year; simultaneously we will do the cutting, filling and leveling and the acquisition processes but after that the minimum time which is required is about three years. So, I would say 2018 beginning.
Latha: We will know the builder before this year is out. When will we know who is building it?
A: This whole process of finding PPP partner normally takes about a year. So, by December or January next year, we should know who is coming.
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